Six major money changes coming in May
April was a monumental month for price rises but as the cost of living crisis tightens its grip on millions of UK households, May will usher in a fresh batch of money changes.
It follows on from last month’s record-breaking price hikes that sent energy prices soaring 54% but as the country braces for yet another energy price cap rise in just a few months’ time, it pays to be prepared.
In this article, we’ll outline the major money changes coming this month and what they mean for your finances.
The interest rate has been raised
With the country’s inflation rate hitting a 30-year high of 7% last month, the Bank of England has responded by raising the interest rate from 0.75% to 1%, the highest level seen since 2009.
The UK interest rate – also known as the base rate or bank rate – is the rate at which the Bank of England charges the country’s banks and lenders. It has a direct impact on the cost of borrowing, savings, mortgages, and pensions, and tends to move in the opposite direction from inflation.
Whether your mortgage will be impacted depends on the type and length of your loan with fixed rate mortgages unlikely to be affected but banks and lenders generally free to decide interest rates on standard variable rate (SVR) mortgages.
Universal Credit will replace legacy benefits
The UK benefits system will undergo a major overhaul this month with millions of existing legacy benefits claimants invited to make the switch to Universal Credit.
It stems from plans first introduced in the Welfare Reform Act 2012 to gradually phase out old-style benefits with 2.6 million people currently claiming Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit to be transferred to Universal Credit.
The managed migration has experienced delays due to the pandemic, but the Department for Work and Pensions (DWP) expects the process to be completed by the end of 2024.
Sky has increased its prices
Sky has increased the price of its UK landline and mobile rates by 10% with customers now paying 22p instead of 20p for 60 seconds of talk-time.
It comes just weeks after broadband and TV customers were slapped with a £43 price hike on their annual bills and the provider confirmed roaming charges would resume for mobile customers holidaying abroad from this month.
Because Sky is one of the few providers that doesn’t include annual inflation-base price increases in its contract terms and conditions, however, you could be well within your rights to end your contract without paying the usual cancellation fee if the latest price hikes have left you looking elsewhere for a cheaper deal.
Households will receive a £150 council tax rebate
This month, thousands of households will be given a council tax rebate of up to £150.
It is part of a £9 billion package announced by Chancellor Rishi Sunak in February to help families tackle the rising cost of living and will apply to homes in council tax bands A, B, C, and D in England, Scotland, and Wales.
But with councils given until September 30 to deposit the money, some families face a long and unpredictable wait until the bonus payment actually arrives in their bank account.
The refund is expected to provide some much-needed financial support to 20 million households in England, 1.9 million households in Scotland, and 1 million households in Wales.
£17 million worst of Tesco Clubcard points will expire
On May 31, £17 million worth of unspent Tesco Clubcard points originally issued in May 2020 will expire.
In light of this deadline, the UK supermarket giant is urging customers to spend any unclaimed vouchers before the end of the month and have already contacted those with outstanding balances with their ‘value hacks’ campaign aimed at helping customers cut costs.
Under the Tesco Clubcard scheme, which was first introduced in 1995, customers earn a point for every £1 spent instore and every £2 spent on fuel with each point, essentially, worth 1p and 150 points worth a £1.50 voucher.
Voxi will introduce EU roaming charges
Voxi will introduce EU roaming charges for up to 550,000 customers holidaying in Europe from May 27.
The contract-free network, which is powered by Vodafone, has confirmed that free EU roaming has come to an end and customers must now purchase a 30-day EU roaming pass to make calls, send texts, and consume data if they plan to travel to any of the 49 countries or destinations in the EU.
The pass costs £2 for one day, £4 for two days, £8 for eight days, and £15 for 15 days, and will cover unlimited texts and calls, even if your usual SIM doesn’t.
Virgin Media and O2 have shunned the move and have pledged to continue providing free mobile roaming so customers can make calls, send texts, and consume data abroad just as they would in the UK.
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